Abbott Laboratories announced Wednesday, Oct. 21, that it will spin off its nutrition business into a separate publicly traded company with roughly $8.5 billion in annual sales.
The new company's headquarters will remain in the Chicago area, an Abbott spokesperson told the Chicago Tribune. The separation carves household brands like Similac, Ensure, Pedialyte, PediaSure and Glucerna away from the Abbott Park-based healthcare giant. The new nutrition company will keep about 16,000 employees and 14 manufacturing sites worldwide, according to Abbott's announcement.
Abbott expects to complete the tax-free separation by the end of 2027, pending regulatory approvals and a final vote by its board of directors. Shareholders will receive stock in both companies.
Robert B. Ford, Abbott's chairman and CEO, said during the Oct. 21 earnings call that the nutrition market has shifted toward consumer wellness trends. Ford said the nutrition business would likely operate faster and more effectively on its own, the Tribune reported.
Daniel Salvadori, currently Abbott's executive vice president and group president for Established Pharmaceuticals and Nutritional Products, will become CEO of the new nutrition company. Salvadori joined Abbott in 2014.
After the split, Abbott will retain about $42 billion in annual sales and roughly 106,000 employees. Its remaining portfolio covers medical devices, diagnostics, biowearables and established medicines.
The nutrition unit has been a drag on Abbott's U.S. performance. Domestic nutrition sales fell 4.5% during the first nine months of 2026 compared with the same period in 2025, the only Abbott business segment to decline, the Tribune reported. Globally, third-quarter nutrition sales rose 5.1%.
The spinoff also follows years of legal trouble tied to Abbott's infant formulas. In August, Abbott agreed to pay $670 million to settle claims that its formula for premature babies causes a dangerous intestinal disease, the Tribune reported. The company still faces about 1,700 related lawsuits nationwide.
Ford said on the earnings call that the outstanding litigation does not need to be fully resolved before the spinoff closes. Both companies will be "well-capitalized to continue to defend the legal positions here," he said, according to the Tribune.
This is Abbott's second major spinoff. In 2013, the company separated its pharmaceutical business into AbbVie, now based in North Chicago.
The nutrition business will continue operating under Abbott through the separation process. Goldman Sachs is serving as financial advisor and Wachtell, Lipton, Rosen & Katz as legal counsel.
